Bitcoin exits oversold condition: The NVT Golden Cross indicator confirms market reversal

Are investors about to witness a structural shift in the Bitcoin market? On-chain signals suggest yes. After a thorough analysis of the Network Value to Transactions (NVT) Golden Cross indicator, experts like MorenoDV confirm that BTC has officially exited the oversold territory, a technical event that could transform the landscape for traders and holders. With Bitcoin currently trading at $92.86K (after a -2.43% drop in 24 hours), understanding what this turn means is essential.

The technical meaning behind oversold conditions

In technical analysis, when an asset is oversold, it operates significantly below its fundamental value, typically driven by cascading selling pressure. For Bitcoin, this extreme condition often precedes critical inflection points.

The key here is to understand what undervalued means in on-chain context: the NVT Golden Cross indicator measures exactly that. When BTC is undervalued according to this indicator (readings below -1.6), selling pressure has reached irrational highs. The recent move from -0.58 to 0.32 marks the beginning of correcting that imbalance.

This change is not merely statistical: it represents the exhaustion of irrational selling and the start of price revaluation.

The metric changing the game: NVT Golden Cross explained

MorenoDV highlights the NVT Golden Cross as the fundamental signal of structural change. This sophisticated indicator compares Bitcoin’s market capitalization with the transaction volume on its network, offering a unique perspective on whether the price reflects the blockchain’s actual utility.

How to interpret the readings:

• Readings above 2.2: Bitcoin is overvalued, disconnected from its transactional utility
• Readings below -1.6: Bitcoin is undervalued, suggesting that what undervalued means in this context is precisely this downward disconnect
• The recent cycle low (before the current rebound) typically anticipates short-term price bottom formation

The upward movement from that cyclical low toward positive territory indicates a structural revaluation in progress.

Why does this matter more than ever now?

Bitcoin’s current gradual recovery phase marks the transition from speculative fear to the building of real value. For market participants, this represents:

Critical psychological reset period: After mass selling, participants rationalize the price. Sentiment begins to shift when on-chain data like the NVT Golden Cross confirm that the worst is over.

Emerging support structure: A gradual (not V-shaped) recovery allows for consolidation and testing new levels. This is structurally healthier than a V-shaped rebound that could fall again.

Opportunity windows: Although Bitcoin shows volatility with its current -2.43% drop in 24 hours, the overall direction of the indicator suggests increasing safety margins. This is critical for positioning.

However, patience remains essential. A gradual recovery can extend over weeks or months, alternating consolidation with incremental bullish moves.

Practical perspective: How to use this information

This on-chain analysis offers valuable context, not certainties. Here are the recommended steps:

• Monitor the indicator: Watch if the NVT Golden Cross continues its positive trajectory in the coming weeks
• Risk management: Gradual recoveries can be volatile; ensure your positioning reflects your actual risk tolerance
• Cross-validation: Combine these metrics with trading volume, macroeconomic trends, and other on-chain indicators

Frequently Asked Questions

What is the difference between being oversold and undervalued?

Oversold is a temporary technical condition of excessive selling. Being undervalued (what does undervalued mean: when the price is disconnected from fundamentals) can be permanent or temporary depending on the metric. The NVT Golden Cross measures exactly this disconnect.

Does this guarantee an immediate price increase?

No. It indicates that extreme selling conditions have eased, improving the chances of stabilization or recovery. Other factors will continue to influence price action.

How reliable is the NVT Golden Cross?

Historically, extreme readings of this indicator have coincided with significant cycle lows. While no indicator is infallible, the data support its use as a potential inflection signal.

Should I invest based solely on this signal?

Absolutely not. It should be part of a comprehensive strategy considering your personal research, financial goals, risk tolerance, and confirmation from multiple data sources.

The road ahead

Bitcoin’s rise out of oversold territory marks a hopeful moment. With the NVT Golden Cross confirming the structural change and BTC showing gradual recovery from its cyclical lows, the outlook for long-term holders becomes more favorable, though patience and discipline are required.

The turn has begun. What happens in the coming weeks will determine whether this recovery consolidates into a sustained trend or faces new tests.